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CME Group (CME) Up 2.5% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for CME Group Inc. (CME - Free Report) . Shares have added about 2.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
CME Group Q1 Earnings Beat, Revenues Miss Estimates
CME Group Inc. reported first-quarter 2017 adjusted earnings per share of $1.22 that beat the Zacks Consensus Estimate. The bottom line also increased from the year-ago earnings of $1.20.
Results were primarily driven by lower expenses. The quarter witnessed record average daily volume (ADV).
Including one-time items, net income was $1.18 per share in the reported quarter compared with $1.09 a year ago.
Performance in Detail
Revenues decreased 12.2% year over year to $929 million. Also, the reported figure missed the Zacks Consensus Estimate of $932 million. Decline in revenues may be attributable to lower clearing and transaction fees, and lesser market data and information services revenues.
Total expenses decreased 9% year over year to $328 million during the reported quarter.
Operating income improved about 4.7% from the prior-year quarter to $601.2 million.
Average daily volume (ADV) increased 1% year over year to a record 17 million contracts, with growth across three of the six product lines. Average rate per contract increased in three of the six product lines.
Financial Update
As of Mar 31, 2017, CME Group had $1.38 billion of cash and marketable securities compared with $1.95 billion at year-end 2016. Long-term debt of $2.23 billion as of Mar 31, 2017, remained largely flat with the prior-year period.
As of Mar 31, 2017, the company had total assets worth $75.5 billion, up from $69.4 billion at year-end 2016.
The company paid dividends worth $1.3 billion in the quarter.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
At this time, CME Group's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. Following the exact same course, the stock was allocated also a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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CME Group (CME) Up 2.5% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for CME Group Inc. (CME - Free Report) . Shares have added about 2.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
CME Group Q1 Earnings Beat, Revenues Miss Estimates
CME Group Inc. reported first-quarter 2017 adjusted earnings per share of $1.22 that beat the Zacks Consensus Estimate. The bottom line also increased from the year-ago earnings of $1.20.
Results were primarily driven by lower expenses. The quarter witnessed record average daily volume (ADV).
Including one-time items, net income was $1.18 per share in the reported quarter compared with $1.09 a year ago.
Performance in Detail
Revenues decreased 12.2% year over year to $929 million. Also, the reported figure missed the Zacks Consensus Estimate of $932 million. Decline in revenues may be attributable to lower clearing and transaction fees, and lesser market data and information services revenues.
Total expenses decreased 9% year over year to $328 million during the reported quarter.
Operating income improved about 4.7% from the prior-year quarter to $601.2 million.
Average daily volume (ADV) increased 1% year over year to a record 17 million contracts, with growth across three of the six product lines. Average rate per contract increased in three of the six product lines.
Financial Update
As of Mar 31, 2017, CME Group had $1.38 billion of cash and marketable securities compared with $1.95 billion at year-end 2016. Long-term debt of $2.23 billion as of Mar 31, 2017, remained largely flat with the prior-year period.
As of Mar 31, 2017, the company had total assets worth $75.5 billion, up from $69.4 billion at year-end 2016.
The company paid dividends worth $1.3 billion in the quarter.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
CME Group Inc. Price and Consensus
CME Group Inc. Price and Consensus | CME Group Inc. Quote
VGM Scores
At this time, CME Group's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. Following the exact same course, the stock was allocated also a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.